Doctrine of merger bars section 263 revision where assessment merely implements appellate directions and lacks independent existence.

Where an assessment denying exemption was carried in appeal and the appellate authority directed allowance of exemption under section 11, the Income-tax Officer's order implementing that direction ceased to have an independent existence. The doctrine of merger applied, so the assessment order was absorbed into the appellate order and was not a separate subsisting order capable of revision under section 263. Any attempt to revise it would, in substance, amount to revising the appellate order itself, which was impermissible. The Commissioner therefore lacked jurisdiction to interfere, and the revision was without authority of law.

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Issues: Whether the Commissioner could invoke revisional jurisdiction under section 263 of the Income-tax Act, 1961 to revise the assessment order after the Income-tax Officer had merely carried out the appellate directions and the assessment had merged with the appellate order.

Analysis: The assessment order denying exemption was carried in appeal, and the Appellate Assistant Commissioner directed allowance of exemption under section 11. The Income-tax Officer only implemented that appellate direction. In such a situation, the revised assessment order was not an independent subsisting order amenable to revision. Invoking section 263 would, in substance, amount to revising the appellate order itself, which was impermissible. Since the order sought to be revised had merged with the appellate order, the Commissioner lacked jurisdiction to interfere.

Conclusion: The revision under section 263 was without jurisdiction and the order of the Commissioner was unsustainable in law.

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